Is The End of Interest Rate Hikes in Sight?

The Fed is strongly signaling that it's aggressive interest rate hike regime will come to an end soon, following today’s meeting, citing robust economic conditions and inflation moving lower.

"We no longer state that we anticipate that ongoing rate increases will be appropriate to quell inflation," Powell said. "Instead, we now anticipate some additional policy firming may be appropriate."

Powell noted the shift from the Fed's previous stance centers on the words "will" versus "some" and "may." The message is that further rates aren't guaranteed.

"The end of the rate hiking cycle is in sight," said Jamie Cox, managing partner at Harris Financial Group. "The Fed is trying to navigate the very narrow path between defeating inflation and destroying the economy with blunt force rate hikes — even they now know the latter is a very real risk."

Some had urged the central bank to pause its rate hikes, at least temporarily, in order to assess the fallout from the collapse of Silicon Valley Bank and Signature Bank earlier this month.

It appears that the issue with the banking system played a part in rates being raised by a quarter point rather than a half a point, which had previously been predicted, because banks will tighten their lending practices and borrowers may find it more difficult to obtain credit and eventually scale back their spending. So the banking situation may have done some of the work for the Fed.